Argentina’s second tax increase of the year: Massa established 8% VAT for small traders of digital platforms

The Argentine Minister of Economy, the lawyer Sergio Massa, determined a new tax increase on small traders, and this is the second tax increase in less than 30 days of the year.

The AFIP (Federal Administration of Public Revenues) was instructed to apply the Value Added Tax (VAT) with a reduced rate of 8% on commissions paid by merchants on e-commerce platforms, including Rappi, Despegar, Cabify, Mercado Libre, Frávega, Corro Oficial, Pedidos Ya, among many others.

The tax will apply as long as a monthly turnover amount of $200,000 has been exceeded, and will affect taxpayers who are not registered as taxpayers.

Small traders will be obliged to act as VAT collection agents but under a special and simplified VAT regime.

VAT will be applied whenever the collection of the corresponding commission is registered, regardless of whether the full payment is made or only a part of it is collected, in the eyes of the AFIP this is indistinct and taxation takes place, although, from the point of view of the small taxpayer, it is a heavy burden.

Unusually, persons not classified as registered taxpayers will have to bear a greater tax burden than those who are included in this regime.

Specifically, registered taxpayers will continue to receive a tax rate of 1% under normal conditions, 3% if they are in arrears with their payments to the tax authorities, and up to 5% for those who do not have an electronic tax domicile duly filed.

This maneuver seeks to accentuate the tax pressure, especially on those persons who operate informally, or who do not operate informally but are involved in operations that are not subject to tax payment.

It seeks to broaden the taxable base of VAT taxpayers.

The new VAT application is the second tax increase launched by Kirchnerism so far this year 2023.

So far this year, the increase of taxes on electronic products, including both those assembled in Tierra del Fuego and those produced abroad, has also been approved.

The return of the tariff on computers, which had been eliminated in 2017 by the previous administration, is also being analyzed.

Massa’s team studies reintroducing the tax with an initial rate of 16% ad-valorem, thus making technology prices more expensive again for the bulk of the population.

The measure is supported and promoted by the Chamber of Electronic Industries (Cadieel), which exercises lobbying power so that the Government favors protectionism and produces a transfer of resources from society to a handful of businessmen protected by tariffs.

The main reason for the fiscal adjustment carried out by Sergio Massa is explained by the increase in tax revenues, and not really by the adjustment of public expenditure.

In this sense, the new provisions of the AFIP aim precisely at deepening this line of action in view of the fiscal period 2023.

With information from Derecha Diario